(B) MATERIAL ACCOUNTING POLICIES
(i) Basis of preparation:
These Standalone Financial Statements of the
Company have been prepared in accordance
with Indian Accounting Standard (“Ind AS") and
comply with requirements of Ind AS notified under
Section 133 of the Companies Act, 2013 (“the
Act"), read together with the Companies (Indian
Accounting Standards) Rules, 2015 as amended
from time to time, stipulation contained in
Schedule III (Revised) and other pronouncements/
provisions of applicable laws and the guidelines
issued by Securities and Exchange Board of India,
to the extent applicable.
These Standalone Financial Statements have
been prepared using the material accounting
policies and measurement basis summarised
below. These accounting policies have been
used consistently applied throughout all
periods presented in these standalone financial
statements, unless stated otherwise
The Standalone Financial Statements have been
prepared on a historical cost basis, except for the
following assets and liabilities which have been
measured at fair value:
i. Derivative financial instruments;
ii. Certain financial assets and liabilities
measured at fair value (refer accounting
policy regarding financial instruments);
iii. Defined benefit plans- plan assets measured
at fair value; and
iv. Share based payments.
The Company presents assets and liabilities in
the balance sheet based on current/non-current
classification. An asset is treated as current if it
satisfies any of the following conditions:
i. Expected to be realised or intended to sold
or consumed in normal operating cycle;
ii. Held primarily for the purpose of trading;
iii. Expected to be realised within twelve months
after the reporting period; or
iv. Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current if it satisfies any of the
following conditions:
i. It is expected to be settled in normal
operating cycle;
ii. It is held primarily for the purpose of trading;
iii. I t is due to be settled within twelve months
after the reporting period; or
iv. There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified
as non-current assets and liabilities.
The operating cycle is the time between the
acquisition of assets for processing and its
realisation in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.
The Standalone financial statements of the
Company have been presented in Indian Rupees
('), which is also its functional currency and all
amounts disclosed in the standalone financial
statements and notes have been rounded off
to the nearest lacs as per the requirement of
Schedule III to the Act, unless otherwise stated.
(ii) Fair value measurements
The Company measures financial instruments at
fair value which is the price that would be received
to sell an asset or paid to transfer a liability in an
orderly transaction between independent market
participants at the measurement date. The fair
value measurement is based on the presumption
that the transaction to sell the asset or transfer
the liability takes place either:
» In the principal market for the asset or
liability, or
» In the absence of a principal market, in the most
advantageous market for the asset or liability.
All assets and liabilities for which fair value
is measured or disclosed in the Standalone
Financial Statements are categorised within the
fair value hierarchy, described as follows, based
on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
Level 2 - Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable; and
Level 3 - Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
For assets and liabilities that are recognised in the
balance sheet at fair value on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.
(iii) Revenue
Revenue is recognised upon transfer of control
of promised product or services to customer in
an amount that reflect the consideration which
the Company expects to receive in exchange for
those product or services at the fair value of the
consideration received or receivable, which is
generally the transaction price, net of any taxes/
duties and discounts.
The Company earns revenue from Educational
and training business, sales of text books and
integrated marketing and management services.
Revenue from services
Revenue in respect of educational and training
programme received from students is recognised
in the statement of profit and loss over the service
period in proportion to the stage of completion
of the services at the reporting date. The stage
of completion is assessed by reference to the
curriculum. Fee is recorded at invoice value,
net of discounts and taxes, if any. The revenue
from time and material contracts is recognised
at the amount to which the Company has right
to invoice.
If the services rendered by the Company exceed
the payment, a contract asset is recognised. If
the payment exceed the services rendered, a
contract liability is recognised. Revenue from
training is recognised over the service period
of delivery.
In case of EdTech segment, the Company offers to
collect payment from its customers either on one
time basis at the beginning of the performance
obligation or on instalment plan basis during
the performance obligation. In case of MarTech
segment, the Company receives certain amount of
payment upfront while the remaining is collected
over the completion of performance obligations.
Performance obligation:
The performance obligation provides the
aggregate amount of the transaction price yet
to be recognised as at the end of the reporting
period and an explanation as to when the
Company expects to recognize these amounts
in revenue.
Revenue as an agent
The Company derives its revenue from event
and managed manpower services. When the
Company determines that the nature of its
promise, is a performance obligation to provide
the specified goods or services itself (i.e. entity
is the principal), then it recognises the revenue
earned as the gross amount of consideration.
However, where the Company promise, is to
arrange, for the customer to provide goods/
services as an agent then revenue is recognised
only to extent of commission/markup/charges
earned by it. In such cases the Company does
not control the goods and services provided
to a customer. The indicators evaluated by
the Company to conclude if it is an agent are
the following:
(a) That another party is primarily responsible
for fulfilling the contract;
(b) The Company does not have any
inventory risk;
(c) The Company does not have discretion
in establishing prices for the other party's
goods or services and, therefore, the benefit
that the Company can receive from those
goods or services is limited;
(d) the Company's consideration is in the
form of a commission / service charge or
markup; and
(e) the Company is not exposed to credit risk
for the amount receivable from a customer
in exchange for the other party's goods
or services.
Revenue from sale of text books
Revenue from Sale of Textbooks is recognized
at the point of time upon transfer of control of
promised goods to the customer in an amount
that reflects the consideration the Company
expects to receive in exchange for those goods
i.e. when it is probable that the entity will
receive the economic benefits associated with
the transaction and the related revenue can
be reliably measured. Revenue is recognized at
the fair value of the consideration received or
receivable, which is generally the contracted
price, net of any taxes/duties and discounts
considering the impact of variable consideration.
Revenue is measured based on the transaction
price, which is the consideration, adjusted
for volume discounts, service level credits,
performance bonuses and price concessions,
if any, as specified in the contract with the
customer. Revenue also excludes taxes collected
from customers.
I n case of test preparation services, sale of text
books is recognised at the time of receipt of
payment on account of education and training
program provided by the Company and is
recorded net of discounts and taxes, if any.
Revenue is recognized upon transfer of control
of promised products or services (“performance
obligations") to customers in an amount that
reflects the consideration the Company has
received or expects to receive in exchange for
these products or services (“transaction price").
When there is uncertainty as to collectability,
revenue recognition is postponed until such
uncertainty is resolved.
The customer pays the fixed amount based on
a payment schedule. If the services rendered by
the Company exceed the payment, a contract
asset is recognised. If the payment exceed
the services rendered, a contract liability is
recognised. Revenue from training is recognised
over the period of delivery.
Contract Liabilities (Unearned Revenue)
A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration
(or an amount of consideration is due) from
the customer. Amounts billed and received
or recoverable prior to the reporting date for
services and such services or part of such
services are to be performed after the reporting
date are recorded as contract liabilities as per
the provisions of the Ind AS-115.
Other operating income
Revenue in respect of start-up fees from
franchisees is recognised on performing a
contractually agreed assignment over a period
of time, whether during a single period or over
more than one period as per agreed terms of the
franchise agreement.
Revenue from commission from Universities in
India or abroad is recognised on accrual basis.
Income from advertising is recognised on
stage of completion basis as per the terms of
the agreement
Contract Balances
Trade receivables
A receivable represents the Company's right to
an amount of consideration that is unconditional
(i.e. only the passage of time is required before
payment of the consideration is due).
Impairment of Trade Receivable
The Company measures the Expected Credit
Loss (“ECL") associated with its assets based
on historical trends, industry practices and
the general business environment in which it
operates. The impairment methodology applied
depends on whether there has been a significant
increase in credit risk. ECL impairment loss
allowance (or reversal) recognised during the
period is recognised as income/ expense in the
Standalone Statement of Profit and Loss under
the head 'other expenses'.
A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration
(or an amount of consideration is due) from
the customer. Amounts billed and received
or recoverable prior to the reporting date for
services and such services or part of such
services are to be performed after the reporting
date are recorded as contract liabilities as per
the provisions of the Ind AS-115 and shown in
other current liabilities.
Rental income
Rental income from investment property is
recognised as part of revenue from operations
in the statement of profit or loss on a straight¬
line basis over the term of the lease except where
the rentals are structured to increase in line with
expected general inflation.
Interest income
Interest income on time deposits and inter
corporate loans is recognised using the effective
interest method.
The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments or
receipts through the expected life of the financial
instrument to the gross carrying amount of the
financial asset.
Dividend
Dividend income is recognised in profit and loss
on the date on which the Company's right to
receive payment is established.
Other income
Other income other than above like rewards and
recoveries are recognised on accrual basis.
(iv) Inventories
Inventories comprising of traded goods are
measured at the lower of cost and net realisable
value. The cost of inventories is computed on
weighted average basis formula.
The Cost comprises all costs of purchases and
other costs incurred in bringing the inventory
to their present location and condition. Net
realisable value is the estimated selling price in the
ordinary course of business less estimated costs
necessary to make the sale. The comparison of
cost and net realisable value is made on an item-
by-item basis.
(v) Property, plant and equipment
Measurement at recognition:
Property, plant and equipment are stated at
cost, net of accumulated depreciation and
accumulated impairment losses, if any.
Cost comprises the purchase price, borrowing
costs if capitalisation criteria are met and any
directly attributable cost of bringing the asset
to its working condition for the intended use.
Any trade discounts and rebates are deducted
in arriving at the purchase price. The cost of an
item of property, plant and equipment shall be
recognised as an asset if, and only if:
a) it is probable that future economic benefits
associated with the item will flow to the
entity; and
b) the cost of the item can be measured reliably.
Property, plant and equipment under construction
are disclosed as capital work-in-progress. Cost
of construction that relate directly to specific
property, plant and equipment and that are
attributable to construction activity in general
are included in capital work-in-progress.
Subsequent expenditure related to an item of
property, plant and equipment is added to its
book value only if it increased the future benefits
from the existing asset beyond its previously
assessed standard of performance. All other
expenses on existing assets, including day-to-day
repair and maintenance expenditure and cost of
replacing parts, are charged to the Standalone
Statement of Profit and Loss for the period during
which such expenses are incurred.
Depreciation
Depreciation is calculated on cost of items
of property, plant and equipment less their
estimated residual value over their useful life
using straight line method and is recognised in
the standalone statement of profit and loss.
The estimated useful lives of items of property,
plant and equipment for the current and
comparative periods are as under and the same
are equal to lives specified as per schedule II of
the Act.
Based on technical evaluation and consequent
advice, the management believes that its
estimates of useful lives as given above best
represent the period over which management
expects to use these assets.
Depreciation on addition to property, plant and
equipment is provided on pro-rata basis from
the date the assets are ready for intended use.
Depreciation on sale/discard from property, plant
and equipment is provided for up to the date of
sale, deduction or discard of property, plant and
equipment as the case may be.
Depreciation method, useful lives and residual
values are reviewed at each financial year-
end, and changes, if any, are accounted
for prospectively.
The residual values, useful lives and method of
depreciation of property, plant and equipment
are reviewed at each financial year end and
adjusted prospectively, if appropriate.
Reclassification to investment property
When the use of a property changes from owner-
occupied to investment property, the property is
reclassified as investment property at its carrying
amount on the date of reclassification.
Capital Advances
Advances paid towards acquisition of property,
plant and equipment outstanding at each
reporting date is classified as capital advances.
Derecognition:
An item of property, plant and equipment and
any significant part initially recognised is de¬
recognised upon disposal or when no future
economic benefits are expected from its use
or disposal. Any gain or loss arising on de¬
recognition of the asset (calculated as the
difference between the net disposal proceeds
or amount of security deposit adjusted and the
carrying amount of the asset) is included in the
Standalone Statement of Profit and Loss when
the asset is de-recognised.
(vi) Investment property
I nvestment properties are measured initially at
cost, including transaction costs. Subsequent
to initial recognition, investment properties are
stated at cost less accumulated depreciation and
accumulated impairment loss, if any.
The Company depreciates building component
of investment property over 60 years from the
date of original purchase on straight line basis in
accordance with Schedule II to the Act.
Though the Company measures investment
property using cost-based measurement, the
fair value of investment property is disclosed
in the notes. Fair value is determined by an
independent valuer who holds a recognised
and relevant professional qualification and
has recent experience in the relevant location
and category of the investment property being
valued. Investment properties are derecognised
either when they have been disposed of or when
they are permanently withdrawn from use and
no future economic benefit is expected from
their disposal. The difference between the net
disposal proceeds and the carrying amount
of the asset is recognised in profit or loss in
the period of derecognition. In determining the
amount of consideration from the derecognition
of investment property the Company considers
the effects of variable consideration, existence
of a significant financing component, non-cash
consideration, and consideration payable to the
buyer (if any).
Transfers are made to (or from) investment
property only when there is a change in use.
(vii) Intangible assets
Intangible assets acquired separately are
measured on initial recognition at cost. The
cost of intangible assets acquired in a business
combination is their fair value at the date of
acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated
amortisation and accumulated impairment
losses, if any.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired. The
amortisation period and the amortisation method
for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting
period. Changes in the expected useful life or
the expected pattern of consumption of future
economic benefits embodied in the asset are
considered to modify the amortisation period
or method, as appropriate, and are treated as
changes in accounting estimates.
The amortisation expense on intangible assets
with finite lives is recognised in the standalone
statement of profit and loss unless such
expenditure forms part of carrying value of
another asset.
An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected
from its use or disposal. Any gain or loss arising
upon derecognition of the asset (calculated as
the difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the standalone Statement of Profit and Loss.
when the asset is derecognised.
The residual values, useful lives and method of
depreciation of intangible assets are reviewed
at each financial year end and adjusted
prospectively, if appropriate.
Internally generated intangibles, excluding
capitalised development costs, are not capitalised
and the related expenditure is reflected in profit
or loss in the period in which the expenditure is
incurred. Development expenditure is capitalised
as part of the cost of the resulting intangible
asset only if the expenditure can be measured
reliably, the product or process is technically and
commercially feasible, future economic benefits
are probable, and the Company intends to and has
sufficient resources to complete development
and to use or sell the asset. Otherwise, it is
recognised in the standalone Statement of
Profit and Loss as incurred. Subsequent to initial
recognition, the asset is measured at cost less
accumulated amortisation and any accumulated
impairment losses.
(viii)Business Combination and Goodwill
Business combinations are accounted for using
the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration
transferred measured at acquisition date fair value
and the amount of any non-controlling interests
in the acquiree. For each business combination
the Company elects whether to measure the non¬
controlling interests in the acquiree at fair value
or at the proportionate share of the acquiree's
identifiable net assets. Acquisition-related costs
are expensed as incurred.
At the acquisition date, the identifiable assets
acquired, and the liabilities assumed are
recognised at their acquisition date fair values.
For this purpose, the liabilities assumed include
contingent liabilities representing present
obligation and they are measured at their
acquisition fair values irrespective of the fact
that outflow of resources embodying economic
benefits is not probable.
However, deferred tax assets or liabilities, and the
assets or liabilities related to employee benefit
arrangements are recognised and measured
in accordance with Ind AS 12 'Income Taxes'
and Ind AS 19 'Employee Benefits' respectively.
When a liability assumed is recognised at the
acquisition date, but the related costs are not
deducted in determining taxable profits until a
later period, a deductible temporary difference
arises which results in a deferred tax asset. A
deferred tax asset also arises when the fair value
of an identifiable asset acquired is less than its
tax base.
When the Company acquires a business, it
assesses the financial assets and liabilities
assumed for appropriate classification and
designation in accordance with the contractual
terms, economic circumstances and pertinent
conditions as at the acquisition date.
If the business combination is achieved in
stages, any previously held equity interest is re¬
measured at its acquisition date fair value and
any resulting gain or loss is recognised in profit
or loss or OCI, as appropriate.
Any contingent consideration to be transferred
by the acquirer is recognised at fair value at
the acquisition date. Contingent consideration
classified as an asset or liability that is a financial
instrument and within the scope of Ind-AS 109
Financial Instruments, is measured at fair value
with changes in fair value recognised in profit
or loss. If the contingent consideration is not
within the scope of Ind-AS 109, it is measured
in accordance with the appropriate Ind-AS.
Contingent consideration that is classified
as equity is not re-measured at subsequent
reporting dates and subsequent its settlement
is accounted for within equity.
Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred and the amount recognised for non¬
controlling interests, and any previous interest
held, over the net identifiable assets acquired
and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate
consideration transferred, the Company re¬
assesses whether it has correctly identified all
of the assets acquired and all of the liabilities
assumed and reviews the procedures used
to measure the amounts to be recognised at
the acquisition date. If the reassessment still
results in an excess of the fair value of net assets
acquired over the aggregate consideration
transferred, then the gain is recognised in OCI
and accumulated in equity as capital reserve.
After initial recognition, goodwill is measured
at cost less any accumulated impairment
losses. For the purpose of impairment testing,
goodwill acquired in a business combination
is, from the acquisition date, allocated to each
of the Company's cash-generating units that
are expected to benefit from the combination,
irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
A cash generating unit to which goodwill has
been allocated is tested for impairment annually,
or more frequently when there is an indication
that the unit may be impaired. If the recoverable
amount of the cash generating unit is less than
its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the
other assets of the unit pro rata based on the
carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised
in statement of profit or loss. An impairment
loss recognised for goodwill is not reversed in
subsequent periods.
Where goodwill has been allocated to a cash
generating unit and part of the operation within
that unit is disposed off, the goodwill associated
with the disposed operation is included in
the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured
based on the relative values of the disposed
operation and the portion of the cash-generating
unit retained.
If the initial accounting for a business combination
is incomplete by the end of the reporting period
in which the combination occurs, the Company
reports provisional amounts for the items for
which the accounting is incomplete. Those
provisional amounts are adjusted through
goodwill during the measurement period, or
additional assets or liabilities are recognised, to
reflect new information obtained about facts and
circumstances that existed at the acquisition date
that, if known, would have affected the amounts
recognized at that date. These adjustments are
called as measurement period adjustments. The
measurement period does not exceed one year
from the acquisition date.
(ix) Income taxes
Tax expense is the aggregate amount included in
the determination of profit or loss for the period
in respect of current tax and deferred tax.
Current income tax
Current income tax is measured at the amount
expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 and
rules thereunder. Current income tax assets and
liabilities are measured at the amount expected
to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to
compute the amount are those that are enacted
or substantively enacted, at the reporting date.
Current income
tax relating to items recognised outside profit or
loss is recognised outside profit or loss (either in
OCI or in equity).
Current tax items are recognised in correlation to
the underlying transaction either in OCI or directly
in equity. Management periodically evaluates
positions taken in the tax returns with respect
to situations in which applicable tax regulations
are subject to interpretation and establishes
provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability
method on temporary differences between the
tax bases of assets and liabilities and their book
bases. Deferred tax liabilities are recognised for
all temporary differences, the carry forward of
unused tax credits and any unused tax losses.
Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be
available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at
the reporting date.
Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or
directly in equity.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities
and the deferred taxes relate to the same taxable
entity and the same taxation authority.
Minimum Alternate Tax (“MAT") credit is
recognised as an asset only when and to the
extent there is convincing evidence that the
relevant members of the Company will pay
normal income tax during the specified period.
Such asset is reviewed at each reporting period
end and the adjusted based on circumstances
then prevailing.
(x) Impairment of non-financial assets
The Company assesses, at each reporting date,
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the
higher of an asset's or cash-generating unit's
(“CGU") fair value less costs of disposal and its
value in use.
Recoverable amount is determined for an
individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or groups of assets.
When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.
I n assessing value in use, the estimated future
cash flows are discounted to their present value
using a pre-tax discount rate that reflects current
market assessments of the time value of money
and the risks specific to the asset. In determining
fair value less costs of disposal, recent market
transactions are taken into account.
If no such transactions can be identified, an
appropriate valuation model is used. These
calculations are corroborated by valuation
multiples, quoted share prices for publicly traded
Company's or other available fair value indicators.
The Company bases its impairment calculation
on detailed budgets and forecast calculations,
which are prepared separately for each of the
Company's CGUs to which the individual assets
are allocated. These budgets and forecast
calculations generally cover a period of five
years. For longer periods, a long-term growth
rate is calculated and applied to project future
cash flows after the fifth year. To estimate cash
flow projections beyond periods covered by the
most recent budgets/forecasts, the Company
extrapolates cash flow projections in the budget
using a steady or declining growth rate for
subsequent years, unless an increasing rate can
be justified. In any case, this growth rate does not
exceed the long-term average growth rate for the
products, industries, or country or countries in
which the entity operates, or for the market in
which the asset is used.
Impairment losses, including impairment on
inventories, are recognised in the standalone
statement of profit and loss.
An assessment is made at each reporting date
to determine whether there is an indication that
previously recognised impairment losses no
longer exist or have decreased. If such indication
exists, the Company estimates the asset's
or CGU's recoverable amount. A previously
recognised impairment loss is reversed only if
there has been a change in the assumptions used
to determine the asset's recoverable amount
since the last impairment loss was recognised.
The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that
would have been determined, net of depreciation,
had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised
in the standalone statement of profit and loss
unless the asset is carried at a revalued amount,
in which case, the reversal is treated as a
revaluation increase.
xi) Financial instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or loss
(“FVTPL"), transaction costs that are attributable
to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement,
financial assets are classified as follows:
a) Financial assets at amortised cost
A 'financial asset' is measured at the
amortised cost where the asset is held within
a business model whose objective is to hold
assets for collecting contractual cash flows;
and contractual terms of the asset give rise
to cash flows on specified dates that are
solely payments of principal and interest.
After initial measurement, such financial
assets are subsequently measured at
amortised cost using the EIR method.
Amortised cost is calculated by taking
into account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The interest income
from these financial assets is included
in finance income in the standalone
statement of profit and loss. The losses
arising from impairment are recognised in
the standalone statement of profit and loss.
This category generally applies to trade and
other receivables.
b) Financial assets at fair value through other
comprehensive income
Assets that are held for collection of
contractual cashflows and for selling
the financial assets, where the cash flow
represent solely payments of principal and
interest, are measured at fair value through
other comprehensive income (“FVOCI"). The
Company has not designated any financial
asset in this category.
Financial asset included within the OCI
category are measured initially as well as
at each reporting date at fair value. Fair
value movements are recognized in OCI.
Interest income is recognized in statement
of profit and loss for debt instruments.
On derecognition of the asset, cumulative
gain or loss previously recognized in OCI is
reclassified from OCI to statement of profit
and loss.
c) Financial assets at fair value through
profit or loss
Fair Value Through Profit or Loss (“FVTPL") is
a residual category for financial asset. Any
financial asset, which does not meet the
criteria for categorisation as at amortized
cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to
designate a financial asset which otherwise
meets amortized cost or FVTOCI criteria, as
at FVTPL. However, such election is allowed
only if doing so reduces or eliminates a
measurement or recognition inconsistency
(referred to as 'accounting mismatch').
Financial assets included within the FVTPL
category are measured at fair value with
all changes recognised in the Standalone
Statement of Profit and Loss. The Company
has not designated any financial asset in
this category.
d) Equity instruments
Equity investments in Subsidiaries are
measured at cost less impairments, if any. All
equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments
which are held for trading and contingent
consideration recognised by an acquirer in
a business combination to which Ind AS 103
'Business Combinations' applies are Ind AS
classified as at FVTPL. Equity instruments
included within the FVTPL category are
measured at fair value with all changes
recognised in the Standalone Statement of
Profit and Loss.
For all other equity instruments, the Company
may make an irrevocable election to present
in other comprehensive income subsequent
changes in the fair values. The Company
makes such election on an instrument-by¬
instrument basis. The classification is made
on initial recognition and is irrevocable.
If the Company decides to classify an
equity instrument as at FVTOCI, then all fair
value changes on the instrument, excluding
dividends, are recognised in the OCI. There
is no recycling of the amounts from OCI to
profit or loss, even on sale of investment.
However, the Company may transfer the
cumulative gain or loss within equity.
De-recognition
A financial asset is derecognised when the
contractual rights to receive cash flows from
the asset have expired or the Company has
transferred its rights to receive the contractual
cash flows from the asset in a transaction in
which substantially all the risks and rewards of
ownership of the asset are transferred.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified as measured
at amortised cost or fair value through profit
and loss.
All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.
The Company's financial liabilities include
trade and other payables, loans and borrowings
including bank overdrafts and derivative
financial instruments.
Subsequent measurement
The measurement of financial liabilities depends
on their classification, as described below:
a) Financial liabilities at FVTPL
Financial liabilities at FVTPL include financial
liabilities held for trading and financial
liabilities designated upon initial recognition
as at fair value through profit or loss.
Financial liabilities are classified as held for
trading if they are incurred for the purpose
of repurchasing in the near term.
This category includes derivative financial
instruments entered into by the Company
that are not designated as hedging
instruments in hedge relationships as
defined by Ind AS 109.
Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS
109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses are recognised
in the statement of profit and loss, except for
those attributable to changes in own credit
risk, which are recognised in OCI. These
gains/ loss are not subsequently transferred
to the statement of profit and loss.
b) Financial liabilities at amortised cost
After initial recognition, financial liabilities
designated at amortised costs are
subsequently measured at amortised cost
using the EIR method. Gains and losses are
recognised in statement of profit and loss
when the liabilities are derecognised as well
as through the EIR amortisation process.
Amortised cost is calculated by taking
into account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The amortisation is
included as finance costs in the statement
of profit and loss.
De-recognition
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the de-recognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are
offset and the net amount is reported in the
standalone Balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle the
liabilities simultaneously.
Derivative financial instruments
Derivatives are initially recognised at fair value on
the date of executing a derivative contract and
are subsequently remeasured to their fair value
at the end of each reporting period. Derivatives
are carried as financial assets when the fair value
is positive and as financial liabilities when the
fair value is negative. Changes in the fair value
of derivatives that are designated and qualify as
fair value hedges are recognised in the statement
of profit and loss immediately, together with any
changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk.
Embedded derivatives are separated from host
contract and accounted for separately if the
host contract is not a financial asset and certain
criteria are met.
(xii) Leases
The Company as a lessee
The Company enters into an arrangement for lease
of buildings. Such arrangements are generally
for a fixed period but may have extension or
termination options. In accordance with Ind AS
116 - Leases, at inception of the contract, the
Company assesses whether a contract is, or
contains a lease. A lease is defined as 'a contract,
or part of a contract, that conveys the right to
control the use an asset (the underlying asset) for
a period of time in exchange for consideration'.
To assess whether a contract conveys the right
to control the use of an identified asset, the
Company assesses whether:
a) The contract involves the use of an identified
asset - this may be specified explicitly or
implicitly, and should be physically distinct
or represent substantially all of the capacity
of a physically distinct asset. If the supplier
has a substantive substitution right, then the
asset is not identified;
b) The Company has the right to obtain
substantially all of the economic benefits
from use of the asset throughout the period
of use; and
c) The Company assesses whether it has the
right to direct 'how and for what purpose'
the asset is used throughout the period of
use. At inception or on reassessment of a
contract that contains a lease component,
the Company allocates the consideration
in the contract to each lease component
on the basis of their relative stand-alone
prices. However, for the leases of land and
buildings in which it is a lessee, the Company
has elected not to separate non-lease
components and account for the lease
and non-lease components as a single
lease component.
Measurement and recognition of leases as a
lessee
The Company recognizes a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date,
plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying
asset or the site on which it is located, less any
lease incentives received.
The right-of-use asset is subsequently measured
at cost less any accumulated depreciation,
accumulated impairment losses, if any and
adjusted for any re-measurement of the lease
liability. The right-of-use asset is depreciated
using the straight-line method from the
commencement date over the shorter of lease
term or useful life of right-of-use asset. Right-of-
use asset are tested for impairment whenever
there is any indication that their carrying amounts
may not be recoverable. Impairment loss, if any, is
recognised in the Statement of Profit and Loss.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the
Company's incremental borrowing rate. Generally,
the Company uses its incremental borrowing rate
as the discount rate.
Lease payments included in the measurement of
the lease liability comprise the following:
a) Fixed payments, including in-substance
fixed payments;
b) Variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;
c) Amounts expected to be payable under a
residual value guarantee; and
d) The exercise price under a purchase option
that the Company is reasonably certain
to exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain
not to terminate early.
The lease liability is measured at amortized
cost using the effective interest rate method. It
is remeasured when there is a change in future
lease payments arising from a change in an index
or rate, if there is a change in the Company's
estimate of the amount expected to be payable
under a residual value guarantee, or if the
Company changes its assessment of whether it
will exercise a purchase, extension or termination
option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or
is recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to
zero, as the case may be.
The Company presents right-of-use assets that
do not meet the definition of investment property
and lease liabilities as a separate line item in the
standalone financial statements of the Company.
The Company has elected not to apply the
requirements of Ind AS 116 - Leases to short¬
term leases of all assets that have a lease
term of 12 months or less and leases for which
the underlying asset is of low value. The lease
payments associated with these leases are
recognized as an expense on a straight-line basis
over the lease term.
(xiii)Employee benefits
Contribution to provident and other funds
Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation, other than the
contribution payable to the provident fund. The
Company recognises contribution payable to
the provident fund scheme as an expense, when
an employee renders the related service. If the
contribution payable to the scheme for service
received before the Standalone Balance Sheet
date exceeds the contribution already paid, the
deficit payable to the scheme is recognised as a
liability after deducting the contribution already
paid. If the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognised
as an asset to the extent that the pre-payment
will lead to, for example, a reduction in future
payment or a cash refund.
Gratuity
Gratuity is a defined benefit scheme. The cost
of providing benefits under the defined benefit
plan is determined using the projected unit credit
method. The Company recognises termination
benefit as a liability and an expense when the
Company has a present obligation as a result
of past event, it is probable that an outflow of
resources embodying economic benefits will be
required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. If the termination benefits fall due
more than twelve months after the balance sheet
date, they are measured at present value of future
cash flows using the discount rate determined by
reference to market yields at the balance sheet
date on government bonds.
Re-measurements, comprising actuarial gains
and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the balance sheet
with a corresponding debit or credit to retained
earnings through Other Comprehensive Income
(“OCI") in the period in which they occur. Re¬
measurements are not reclassified to profit or
loss in subsequent periods.
Past service costs are recognised in Standalone
Statement of Profit and Loss on the earlier of:
» The date of the plan amendment or
curtailment, and
» The date that the Company recognises related
restructuring cost
Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
The Company recognises the following changes in
the net defined benefit obligation as an expense
in the standalone statement of profit and loss:
» Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
» Net interest expense or income
Compensated absences
The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
long-term employee benefit which are computed
based on the actuarial valuation using the
projected unit credit method at the period end.
Actuarial gains/losses are immediately taken to
the standalone statement of profit and loss and
are not deferred. The Company presents the
leave as a current liability in the balance sheet
to the extent it does not have an unconditional
right to defer its settlement for twelve months
after the reporting date. Where Company has
the unconditional legal and contractual right to
defer the settlement for a period beyond twelve
months, the balance is presented as a non¬
current liability.
Accumulated leaves, which is expected to be
utilized within the next twelve months, is treated
as short-term employee benefits. The Company
measures the expected cost of such absences
as the additional amount that it expects to pay
as a result of the unused entitlement that has
accumulated at the reporting date.
All other employee benefits payable/available
within twelve months of rendering the service
are classified as short-term employee benefits.
Benefits such as salaries, wages, bonus, etc. are
recognised in the standalone statement of profit
and loss in the period in which the employee
renders the related service.
(xiv) Share-based payments
The Employee Stock Option Scheme ('the
Scheme') provides for the grant of equity shares
of the Company to its employees. The Scheme
provides that employees are granted an option
to acquire equity shares of the Company that
vests in a graded manner. The options may be
exercised within a specified period. The Company
uses the grant date fair value to account for
its equity settled share based payment plans
granted to employee, with a corresponding
increase in equity over the period that the
employees unconditionally become entitled to
the awards. Compensation cost is measured
using independent valuation by Black-Scholes
model. Compensation cost, if any is amortised
over the vesting period.
The cost is recorded under the head “employee
benefit expense" in the statement of profit
and loss.
(xv) Foreign exchange transactions and
translations
Initial recognition
Foreign currency transactions are recorded in
the reporting currency, by applying the foreign
currency amount of exchange rate between the
reporting currency and foreign currency at the
date of transaction.
Conversion
Foreign currency monetary assets and liabilities
outstanding as at balance sheet date are
restated/translated using the exchange rate
prevailing at the reporting date. Non-monetary
assets and liabilities which are measured in
terms of historical cost denomination in foreign
currency, are reported using the exchange rate at
the date of transaction except for non-monetary
item measured at fair value which are translated
using the exchange rates at the date when fair
value is determined.
Exchange difference arising on the settlement
of monetary items or on restatement of the
Company's monetary items at rates different
from those at which they initially recorded
during the year or reported in previous financials
statement (other than those relating to fixed
assets and other long term monetary assets) are
recognized as income or expenses in the year in
which they arise.
(xvi) Cash and cash equivalents
Cash and cash equivalent in the Balance Sheet
comprise cash at banks and on hand, cheques
on hand and short-term deposits with an original
maturity of three months or less, which are
subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above.
(xvii) Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker.
In accordance with Ind AS 108 - Operating
Segments, the operating segments used to
present segment information are identified on the
basis of internal reports used by the Company's
Management to allocate resources to the
segments and assess their performance.
Segment profit is used to measure performance
as management believes that such information
is the most relevant in evaluating the results of
certain segments relative to other entities that
operate within these industries. Inter-segment
pricing is determined on an arm's length basis.
The operating segments have been identified
on the basis of the nature of products/
services. Further:
1. Segment revenue includes sales and other
income directly identifiable with / allocable
to the segment.
2. Expenses that are directly identifiable with
/ allocable to segments are considered for
determining the segment result. Expenses
which relate to the Company as a whole
and not allocable to segments are included
under unallowable expenditure.
3. I ncome which relates to the Company as
a whole and not allocable to segments is
included in unallowable income.
4. Segment assets and liabilities include those
directly identifiable with the respective
segments. Unallowable assets and liabilities
represent the assets and liabilities that relate
to the Company as a whole and not allocable
to any segment.
The Board of Director(s) are collectively the
Company's 'Chief Operating Decision Maker' or
'CODM' within the meaning of Ind AS 108.
The Company has opted to provide segment
information in its Consolidated financial
statements in accordance with Ind AS 108 -
Operating Segments.
|